Leading stakeholders in Nigeria’s oil and gas sector met at the First Quarter 2023 Business Dinner of the Petroleum Club held at the Civic Centre, Ozumba Mbadiwe Avenue, Victoria Island, Lagos on Thursday 16th February, 2023.
The business dinner, sponsored by ND Western, deliberated upon major issues of concern in the oil patch. The evening was hosted by Sola Adepetun, a prominent oil and gas lawyer and Partner in ACAS Denton Law, who is also a member of the Club’s Board of Governors.
Austin Avuru, Chairman of the Petroleum Club, highlighted some of the industry’s major challenges in his welcome address. First, he argued that the blame on oil theft as a causative factor in Nigeria’s dwindling daily oil production was extremely exaggerated. Second, he called for a greater degree of transparency and better accounting techniques to assess the true extent of oil theft, “because the figures don’t quite add up”. He touched upon the need for better management, and administrative framework covering the industry as a whole. He also expressed concern at the ongoing exchange of batons and transition between oil majors exiting the upstream oil sector here in Nigeria and the indigenous companies taking over their assets, stressing that the whole process needed to be streamlined and made less complicated. Avuru expressed the hope that Nigeria would, by 2024, become engaged in crude oil refining at a significant daily level of capacity.
Immediately following the Chairman’s welcoming address, the Guest Speaker for the evening, Gbenga Komolafe, the Commission Chief Executive of Nigerian Upstream Petroleum Regulatory Commission (NUPRC) was introduced by the host to all members and guests present. After a brief citation of his credentials, Mr. Komolafe presented a paper titled: “Nigerian Upstream Petroleum Sector: Value Optimization Energy Transition and Regulatory Perspectives”. He subdivided his paper into the following areas of interest
(1) Key regulatory areas
• Increasing Nigeria’s Oil and Gas Reserves and Production.
• Developing a transparent approach to hydrocarbon accounting.
• Attaining operational efficiency and effectiveness in our operations.
• Achieving peace and harmony in the host community environment.
• Reducing unit operating cost.
• Creating sanity and predictability.
• Reducing in carbon footprint and the attainment of net zero global emissions target.
(2) Oil and Gas Production Growth Potential
• Data collection and validation for shut-in wells
• Evaluating surface and sub-surface considerations for all shut-in strings
• Developing empirical criteria to identify shut-in wells that can come on stream in the short, mid and long term.
• Identifying and prioritising assets with the potential to increase recovery in the short, mid and long term.
• Engaging industry stakeholders to get their buy-in on this regulatory initiative
• Developing robust action/implementation steps
(3) Development Regulations
• Stakeholder engagement
Natural gas flare elimination regulations, upstream petroleum environment remediation fund regulations, upstream fee and rent regulations, upstream petroleum measurement regulations, significant discovery regulations
• Gazetting in process
Acreage management drilling & production regulations, Nigeria frontier exploration fund regulations, unitization regulations, upstream decommissioning and abandonment regulations, upstream petroleum environmental regulations, upstream petroleum safety regulations.
Host communities development regulations, domestic gas delivery obligation regulations, petroleum licensing round regulations, petroleum royalty regulations, conversion and renewal (License and Leases) regulations.
(4) Key initiatives
• Reactivation of shut-in wells.
• Creation of the Energy Transition/Carbon Monetisation Unit.
• System automation to minimize time for permits and processes approvals.
• Development of regulatory tools.
• Inland basins prospectivity studies.
• Need to set up a committee to conduct forensic audit of crude theft to enhance transparency of petroleum measurement and accounting.
• Cost monitoring and benchmarking.
(5) Investment opportunities in upstream sector in Nigeria with emphasis on
• Open acreages deep water ultra deep water open blocks
• Onshore and shallow water open blocks
• Third parties brown field development
• Gas development, infrastructure and transportation.
(6) Looking ahead to the future.
• The need to harmonize regulatory oversight with best practices.
• Continually ensuring government policies are industry and investment friendly.
• Sustaining strict adherence to transparency in hydrocarbon measurement and accounting.
• Prioritising energy security and increase participation of indigenous players.
• Institutionalization of decarbonisation/monetisation framework.
• Sustaining automation of work processes and technology adaptation in view of energy transition.
After he finished delivering his paper, the NUPRC chief was engaged in a question and answer session. Wole Ogunsanya, Chief Executive Officer of Geoplex Drillteq, asked for the guest speaker to shed more light on the shifting wells procedure and how this could impact increased oil production. Effiong Okon, Executive Director of Operations at SeplatEnergy, called for the industry to become bolder and not shy away from engaging in large scale projects, while Yetunde Taiwo (Mrs) of First E&P based her question on the need for more emphasis on gas development and the overall benefits this could yield for the economy. There was a break for the attendees to have dinner after the Q&A. Upon resumption, the Petroleum Club went on to honour both Komolafe, the guest speaker, and Eberechukwu Orji, Chief Executive Officer of ND Western who were generous sponsors of the evening. Thereafter, the events were drawn to a close.
The Petroleum Club is a non-political and non-profit making advocacy group comprising leaders in the Oil and Gas industry in Nigeria. The club’s principal mandate is to work with stakeholders in the Oil and Gas industry formulating policies and actions necessary for the growth and sustenance of the industry in Nigeria.
Stephen Kola-Balogun is the Principal Partner of Kola Balogun & Partners, Legal Practitioners and a member of the Advisory Board of the Centre for Law and Business.